Tuesday, February 5, 2013

A Trifecta of Political Opportunists

“…The [Civic Committee of the
Commercial] Club [of Chicago; Sidley Austin LLP; and Madigan, Nekritz, and Biss...] claim that
the legislature could, without violating the Pension Clause, unilaterally
‘freeze’ the pension benefits that current public employees ‘earned’
through past service, and reduce the benefits those employees would ‘earn’
going forward through future service. (338)…; [that] ‘compelling arguments
allow the General Assembly to unilaterally cut the pension benefits that
current employees will earn in the future without violating the Pension Clause.
(350) Those arguments, Sidley [et al.] contended, derived not only from its
reading of the Clause and Convention debates, but also from Illinois court
decisions, particularly the Supreme Court’s Peters [v. City of Springfield,
1974] decision and a 1979 Illinois Attorney General opinion. (351)

“Sidley also argued that even if the
Clause prohibited such unilateral action, the legislature could nonetheless
modify pension formulas going forward for existing employees in exchange for
letting them keep their jobs or current salaries and in order to preserve the
pension system. (352) Sidley further argued in a separate statement that if a
State pension fund went bankrupt, then pension recipients would have no legal
recourse against the State for continued benefit payments. (353)… [Former
Illinois Appellate Court] Justice [Gino] DiVito found Sidley’s argument to be
‘deeply flawed’ and without ‘legal merit.’ (355)…

“Sidley’s View Is Not Supported by the
Clause’s Plain Language…[T]here is nothing in the text to
suggest that a member only has a legal interest in rights that he or she
purportedly ‘earns’ on a per day basis. Also, the Clause prohibits unilateral
action by the legislature to diminish or impair the ‘benefits of’
membership in a pension system.The term
‘benefits,’ per its common meaning, denotes not only the specific annuity
payments a public employee is eligible to receive, but also other entitlements
of membership that advantage the employee.

“The
plain language also indicates that an employee’s pension payments and other membership
entitlements are ‘contractual’ rights that may be altered through mutual assent
via contract principles. Finally, the Clause’s prohibition against diminishment
and impairment is cast in absolute terms. As a consequence, the Clause on its
face does not support the claim that the legislature could utilize the pension
system’s present unfunded liabilities as a reason to cut the benefits of
current employees participating in the system…

“Sidley’s
interpretation cannot be squared with the Clause’s plain language and common
meaning.Sidley’s interpretation is without
support for several reasons. First, the Pension Clause nowhere
addresses, as Sidley claims, who may be excluded from pension system
membership. Sidley’s suggestion that the provision only gives a public employee
‘a contractual right not to be excluded’ is classic misdirection and a non
sequitur.

“Second,
while the Pension Clause itself does not detail specific pension rights, the
plain language, as noted above, states that a public employee’s membership in a
pension system is an ‘enforceable contractual relationship.’ Unless the terms
of membership specify otherwise, common sense and logic dictate that a public
employee has a legal interest in his or her membership rights—including any
membership terms governing how benefits are calculated—upon joining a pension
system. The Clause itself does not countenance a contrary result.

“Finally, the inclusion of the phrase ‘benefits
of which shall not be diminished or impaired’ manifests, contrary to Sidley’s
protests, clear evidence of the framers’ intent to limit the General Assembly’s
power to modify pension benefit rights even in the face of a fiscal crisis.
This conclusion is supported by the common dictionary definitions of the terms
‘benefits,’ ‘diminish,’ and ‘impair.’ (364) After all, the Clause’s prohibitory
language contains no exceptions and is fashioned in absolute terms. Illinois
courts have long-construed similar constitutional provisions as disallowing
exigent circumstances to dictate the interpretation of the provision unless the
provision itself permits a departure from its terms. (365)

“In sum, the Pension Clause’s plain
language reveals that an employee’s contractual rights exist and are legally
secured at the time of membership, and those rights cannot be unilaterally
reduced or voided thereafter. Nowhere does the Pension Clause limit protection,
as Sidley claims, to only ‘benefits that were previously earned.’ To reach
Sidley’s conclusion, the provision would need to add the word ‘earned’ or
‘accrued’ before the word ‘benefits’ as is the case with the Hawaii and
Michigan Constitutions. (366)

“Distilled to its essence, Sidley’s
construction ignores the Pension Clause’s plain language, defies common sense
and logic, and adds limitations where none exist. (367) Illinois courts have long explained that the
judicial branch may not add limitations or exceptions where none exist. (368)

“As a result, there is no strength to
Sidley’s argument that ‘the Pension Clause protects only those benefits that an
employee has already earned.’ Because Sidley cannot point to anything either in
the text or the common meaning of the terms used in the Clause to support its
position, Sidley has failed to meet its burden that the Clause should be
read in a way contrary to its natural meaning. (369)…

“Sidley Mischaracterizes the Clause’s
Convention Debates… Sidley attempts to [also] marginalize
the drafters’ intent by inventing a new rule of constitutional interpretation
that has no basis in Illinois law: the Pension Clause cannot be read to support
the position presented in this Article ‘unless the discussion during the
debates established, with unmistakable clarity, that this was the understanding
of the meaning of the Clause that was widely shared by all the delegates who
voted for the Clause.’ (377)

“Contrary to
Sidley’s understanding, the Convention debates confirm that the drafters
intended to protect those pension benefit rights contained in the Pension Code
when an employee joined a pension system, and any later benefit increases…
Illinois Court Decisions Categorically
Reject Sidley’s Interpretation of the Pension Clause…

“[T]he
Illinois Supreme Court instructed, that ‘general language in a [judicial]
opinion must not be ripped from its context to make a rule far broader than the
factual circumstances which called forth the language.’ (427)…In 1982, the Appellate Court in Kuhlmann
v. Board of Trustees of the Police Fund of Maywood, (441) again relied on Kraus
[v. Board of Trustees of the Police Pension Fund of the Village of Niles, 1979]
as well as Ziebell [v. Board of Trustees of the Police Pension Fund of
the Village of Forest Park, 1979] to fashion the following rule regarding
the Clause’s scope: [A]ny alteration of the pension system amounts to a
modification of the existing contract between the State (or one of its
agencies) and all members of the pension system, whether employees or retirees.
A member is contractually protected against a reduction in benefits. By the
same token, a member cannot take advantage of a beneficial pension change without
providing consideration [something of value given in return] for the
contractual modification. This consideration most often takes the form of new
or continued contributions to the pension system. (442)…”

350 Sidley Memo, supra note 346,
at 1 (“[T]he Pension Clause of the Illinois Constitution (Ill. Const., art.
XII, § 5) prohibits State and local governments from reducing pension benefits
that employees earned in prior years, but that there are compelling arguments
that State and local governments may enact legislation that will prospectively
reduce the pension benefits that current employees will earn as a result of future
work performed after the prospective legislation takes effect.”) (Emphasis
in original).

353 Sidley
Austin LLP, State Is Not a Guarantor of State Pension Fund Obligations to
Pension Plan Members, available at http://www.illinoisisbroke.com/files/SidleyGuarantor.pdf
(last visited Feb. 11, 2011). See also Memorandum from
SidleyAustin LLP on The State of Illinois, and the City of Chicago and
Smaller Municipalities, Are Not Guarantors of the Paymentof Pension
Benefits (Dec. 7, 2010) (on file with author).

368 See Toys “R” Us v.
Adelman, 215 Ill. App. 3d 561, 568, 574 N.E.2d 1328 (3rd Dist. 1991) (a
court must construe a statute as it is, and may not supply omissions, remedy
defects, or add exceptions and limitations to the statute’s applications,
regardless of its opinion regarding the desirability of the results of the
statute’s operation).

369 Coalition for Political Honesty
v. State Bd. of Elec., 65 Ill. 2d 453, 464, 359 N.E.2d 138, 143 (1977) (“One
contending that language should not be given its natural meaning understandably
has the burden of showing why it should not. * * * This is a difficult burden
for one who says that language should not be given its common meaning, but it
is proper it should be difficult. Individuals and bodies, as a convention or a
legislature, can hardly be said to intent that language they use is to be given
an opposite meaning.”).

377 Sidley Memo, supra note
345 at 8.

427 Rosewood Care Center v.
Caterpillar, 226 Ill. 2d 559, 572, 877 N.E.2d 1091, 1098 (2007) (“Lesson Number
One in the study of law is that general language in an opinion must not be
ripped from its context to make a rule far broader than the factual
circumstances which called forth the language.”).

Teacher/Poet/Musician

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Persona

A writer must “know and have an ever-present consciousness that this world is a world of fools and rogues… tormented with envy, consumed with vanity; selfish, false, cruel, cursed with illusions… He should free himself of all doctrines, theories, etiquettes, politics…” —Ambrose Bierce (1842-1914?). “The nobility of the writer's occupation lies in resisting oppression, thus in accepting isolation” —Albert Camus (1913-1960). “What are you gonna do” —Bertha Brown (1895-1987).